Jefferies backs SPIE on growth recovery, upgrades Adecco as estimates improve

Investing.com -- Jefferies upgraded SPIE to “buy” from “hold” with a new price target of €55, up from €50, citing greater optimism about the French technical services group’s growth outlook into 2027 and recent share-price weakness that it considers overdone.

The brokerage said organic growth at SPIE is troughing and can accelerate to 4%-5% in 2027-28, supported by a further increase in activity in German high-voltage and grid work, easing headwinds in French fiber and Building Solutions, and an underappreciated exposure to data-center build-out.

Stronger growth and further margin progression point to a 6%-8% compound annual growth rate in organic EPS, or 10%-15% including potential mergers and acquisitions, Jefferies said. SPIE shares, trading at 14 times FY26 price-to-earnings and a free cash flow yield of about 8% following the summer pullback, "now look great value," it said.

Jefferies based its new target price on a 16 times target P/E ratio on FY27 estimates, implying 28% upside from current levels.

The brokerage raised its FY26-28 EPS estimates by 0%-3%, putting them at the top end of consensus, driven by higher organic growth assumptions for FY27-28, primarily in Germany and to a lesser extent France.

Separately, Jefferies upgraded Adecco to “hold” from “underperform” and raised its price target to 20.50 Swiss francs from 13.50 francs, saying its revised estimates are now broadly in line with consensus expectations.

The brokerage raised its adjusted EPS estimates for Adecco by about 3% on average and no longer stands below consensus, with estimates about 2% above consensus on average.

The new price target implies a next-12-months price-to-earnings ratio of about 8.5 times, or roughly 15% downside to its targeted multiples on Randstad, Jefferies said.

Jefferies maintained a cautious fundamental view on the broader staffing sector, citing persistent structural challenges that are likely to prevent the earnings upgrades implied by the sector’s recent strong share-price performance, which it said has primarily been driven by valuation multiple re-rating.

The brokerage kept its “underperform” rating on Randstad, raising its price target to €26, and on Hays, raising its target to 45 pence. Current valuation multiples imply more than 15% upside to street estimates for both, while Jefferies’ estimates remain below consensus, it said.

Jefferies kept its “hold” rating on Michael Page unchanged and raised its price target to 205 pence.

Jefferies named Elis, Compass, Experian, SPIE and the testing and certification companies, with Bureau Veritas most preferred, among its top picks in the broader Business & Employment Services sector for the second half. It named Randstad, Hays, Securitas and Eurofins as least preferred.

You May Also Be Interested In

• Micron offers Taiwan workers up to 68-month bonuses as strike threat looms
• Buy Shopify stock at this ’AI-enabled entry point,’ analyst says
• S&P 500 above 8,000 in 2026 now looks ambitious, Citi says